Explores the general environment and industry forces that affect the movie exhibition industry as a whole.

Explores the general environment and industry forces that affect the movie exhibition industry as a whole.

The case, The Movie Exhibition Industry, Explain the general environment and industry forces that affect the movie exhibition industry as a whole. The first trend in the general environment is audience demographics. The core audience for movie theaters consists of those between the ages of 12-24 years old and account for 30% of all ticket sales. This can be a disadvantage, as they know who to target, but leaves little opportunity for growth. The second trend is technology in the form of digital conversion. This conversion from film to digital creates an opportunity to maximize profit but with a hefty start-up cost. The expansion of studios and technology leads us to the third trend in which theaters must globalize, to secure access to the growing number of international consumers. As the economy grows, the movie theaters lose business to at home viewing options and technologies and margins become slimmer, which is an economic trend. The final trend found is the legal trends, which prevent studios from monopolizing the industry and allow exhibitors to have some bargaining power. These trends seem to lead to a lack of opportunities for exhibitors and can be quite harmful.

As for the five forces of the industry, the threat of new entrants is extremely slim. The cost of entry is too high making entry nearly impossible. Customer buying power is another force that affects this industry. The customers can simply stop going to the theater if the prices are too high or substitutes take precedence. Another major force is the supplier power of movie studios, which supply the movies to the theaters. Studios account for a high concentration of the box office profit and control supply costs. The final two threats, which are similar and cause similar effects are threats of substitutes and rivalry. At-home technology has improved drastically and with the widespread access to streaming media, theaters are becoming obsolete to their substitutes.

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